Should the streaming industry focus on winning over mature markets, or are younger audiences our best hope for growing music subscriptions?

The music industry is witnessing a remarkable surge in music-streaming subscriptions. However, this growth cannot be taken for granted, as industry insiders are increasingly discussing the possibility of reaching a saturation point in the largest and most established markets.

In light of this, various strategies are being vigorously explored to sustain growth, such as focusing on emerging markets and diversifying revenue streams through social media, gaming, and fitness services, as highlighted by rights holders.

Another significant industry effort involves persuading streaming services to implement regular price increases, rather than relying on one-off adjustments. This ongoing drive aims to enhance the sustainability of streaming platforms and promote continued investment in content and user experience.

How Demographics Can Boost Music Subscriptions

Lately, the industry is turning its attention towards demographics, specifically targeting older individuals to encourage music subscription adoption. The latest data from research firm MusicWatch presents a mixed bag of news.

Let’s start with the good news: the ‘Baby Boomer’ demographic offers ample room for growth. This group is made up of individuals born between 1946 and 1964, so ages 59-77. In the United States alone, there are approximately 52 million internet-using boomers. However, the bad news is that only around eight million of them currently subscribe to a music service. Clearly, there is untapped potential within this age group.

MusicWatch’s Annual Music Study sheds further light on this issue. It reveals that if close to half of the boomer population were convinced to pay for an on-demand music service, the US subscriber base would grow by an impressive 20%. However, the study also unveils a significant hurdle: boomers exhibit a low likelihood of converting. Merely 10% of surveyed individuals expressed an inclination to subscribe to an audio service in the upcoming year.

Russ Crupnick, an analyst at MusicWatch, suggests that boomers find satisfaction in traditional music consumption methods such as radio, CDs, and downloads. If they do opt for streaming, they are content with ad-supported services. Consequently, the focus should shift towards persuading the younger generations—Gen Z and millennials—who currently do not pay for streaming services. The likelihood of converting them is considerably higher.

Unlocking the Potential of Music Streaming Subscriptions

It is essential to acknowledge that while streaming has become a substantial revenue stream for the recorded music industry, it does not represent the entirety of its ecosystem. Many music-loving boomers continue to purchase music in physical formats, buy merchandise, and actively participate in concerts and festivals. Hence, though selling streaming subscriptions to boomers may pose challenges, they remain an indispensable segment of the music audience.

To fully capitalise on the potential of music subscriptions and overcome the perceived reluctance among boomers, musicians and industry stakeholders must adopt innovative approaches.

Here are several strategies to consider:

1. Tailored Marketing Campaigns: Craft targeted campaigns that highlight the unique benefits of music subscriptions for boomers. Emphasise the convenience, vast library of music, personalised recommendations, and enhanced audio quality that come with streaming services.
2. Exclusive Content and Experiences: Collaborate with renowned artists or curate special playlists and exclusive live-streamed events specifically catered to the tastes and preferences of mature audiences. This approach can help generate interest and entice them to explore the world of music subscriptions.
3. Seamless Integration with Traditional Formats: Introduce hybrid models that bridge the gap between traditional music formats and streaming services. For example, offer special discounts or bundled packages that include physical albums alongside digital streaming subscriptions.
4. Intuitive User Experience: Enhance the user interface and user experience of streaming platforms to ensure they are user-friendly, intuitive, and accessible to individuals who may be less familiar with digital technologies.
5. Leveraging Social Media: Leverage the power of social media platforms to engage with boomers and provide them with educational content about the benefits of music subscriptions. This can help dispel misconceptions and demonstrate how streaming services can complement their existing music consumption habits.
6. Partnerships and Collaborations: Forge strategic partnerships with organisations catering to boomers, such as fitness centres, retirement communities, and community centres. Explore opportunities to integrate music subscriptions into their offerings, thereby expanding the reach and accessibility of streaming services.
7. Continuous Innovation: Invest in research and development to further improve streaming technology, address any technological barriers that boomers may face, and adapt to their evolving needs and preferences.

By embracing these strategies, the music industry can pave the way for sustained growth in music subscriptions while simultaneously fostering inclusivity and diversifying its consumer base.

Wrapping Up

In conclusion, while the challenges of persuading boomers to embrace music subscriptions are evident, they remain a valuable part of the music audience.

Through tailored marketing campaigns, exclusive content, seamless integration, enhanced user experience, social media engagement, partnerships, and continuous innovation, the industry can tap into the untapped potential and unlock new growth opportunities. By doing so, musicians and music fans alike can continue to enjoy the benefits of a thriving and diverse music streaming landscape.